NASSAU, BAHAMAS – The establishment of a credit bureau will be an important and integral step toward an improved credit culture in The Bahamas, according to Deputy Prime Minister and Minister of Finance K Peter Turnquest.
Turnquest spoke at the recent launch of the Credit Bureau at the British Colonial Hilton.
He noted that under the Government’s near-term strategic objectives, concluding the establishment of a credit bureau has been one of the anticipated reforms that would propel The Bahamas much higher in the global ranking on the Ease of Doing Business index.
“The credit bureau is the essential component for our financial system that is expected to add greater transparency to the process of providing credit to both businesses and households,” Turnquest said.
“It will help to inform judgements about the volume and cost of credit to which borrowers should be entitled. This will ensure that more funding flows to those more deserving borrowers in our economy, while providing more informed justification for financial institutions to limit exposures to riskier prospects.
“This speaks to greater efficiency in the functioning of our credit markets, and improved financial inclusion prospect for many more persons and businesses.”
Turnquest said it was his expectation that the Central Bank will work closely with CRIF Bahamas, which has been licensed to establish and operate the first credit bureau in the Bahamas, to dispel any misconception that a credit bureau is aimed solely at protecting the interests of the lenders.
“More complete disclosures around the level of debt that households and business are carrying, as well transparency around our track records in honouring past obligations, is also expected to encourage a measure of increased accountability, and prudence in how financial affairs are conducted,” Turnquest said.
“This is a good outcome, especially in an environment where, on average, families need to build up higher financial net worth. In recent years, the credit environment in The Bahamas has been sluggish at best in terms of growth coupled with elevated non-performing loans.”
He continued: “In order that lending can resume at a less tentative pace, the information upon which lenders rely to provide credit has to improve. This is a good thing for singling out with greater confidence where more financing ought to flow.
“I am very particularly encouraged the by initiatives that are foreshadowed by CRIF to help those aspiring to operate or expand micro and small businesses to build up a track record that would demonstrate their creditworthiness; and in many instance help them gain access to debt financing for the first time.”
He noted that the licensing of CRIF Bahamas was no overnight achievement.
“This journey began in 2010 when the Central Bank launched The Bahamas Credit Bureau Project. It was followed by extensive dialogue with the Government, the commercial banks and other private sector stakeholders.
“Several Central Bank-led initiatives prepared the way for the launch of the Bureau. I congratulate and applaud of all these all other key stakeholders for their persistence in getting us to this successful point.”
Turnquest said: “It is important too that we acknowledge the valuable technical assistance that The Bahamas received from the International Finance Corporation (IFC) of the World Bank Group, under its Caribbean Credit Bureau Project — a five year IFC project for credit bureau development in the English-speaking Caribbean funded by the Canadian International Development Agency (CIDA).
“This IMF was also supportive through the Caribbean Regional Technical Assistance Centre (or CARTAC). This work documented a relevant understanding of the Bahamian business environment, including our data protection standards and codes, and culminated in the credit bureau legislation that was passed into law in 2018, and the supporting regulations that were issued at the beginning of 2019.”